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By Bloomberg

European equities fell while the yen weakened to a 12-year low, fueling the longest rally in Japan’s Nikkei 225 Stock Average since 1988. Chinese shares dropped, while the euro rose with nickel.

The Stoxx Europe 600 Index slid 0.4 percent at 8:22 a.m. in London. Japan’s currency touched 124.30 against the greenback, the weakest since December 2002. The Nikkei 225 added 0.4 percent, while the Shanghai Composite Index fell 6.5 percent as brokerages tightened lending restrictions. Standard & Poor’s 500 Index futures slipped 0.2 percent. The Australian dollar dropped 0.4 percent and nickel increased 0.6 percent.

The yen has borne the brunt of a resurgent U.S. dollar, slipping the most among Asian currencies over the past five days, as the U.S. Federal Reserve weighs increasing borrowing costs this year. French and German delegates at a meeting of Group of Seven finance chiefs in Dresden pushed back against Greek claims that an agreement over bailout funds is near and called for stronger efforts to resolve the standoff.

“The Fed is going to be hiking rates soon,” said John Gorman, the Tokyo-based head of dollar interest-rate trading for Asia and the Pacific at Nomura Holdings Inc., Japan’s biggest brokerage. “You’re seeing the dollar come to the forefront because it’s the safe-haven currency.”

The Bloomberg Dollar Spot Index was little changed after advancing 1.8 percent the previous four days to the highest since April 21.

China Stocks

The Nikkei 225 and broader Topix index both rose for a 10th day. A weaker yen helps boost export revenue for Japan’s largest companies, which reported record profits in the last fiscal year. The Kospi index in Seoul advanced for the first time this week, gaining 0.2 percent as the won weakened 0.1 percent.

Chinese stocks halted a seven-day, 15 percent rally, while the Hang Seng China Enterprises Index of mainland companies in Hong Kong slumped 5 percent. Changjiang Securities Co. dropped 9.5 percent after joining larger rivals GF Securities Co. and Haitong Securities Co. in increasing margin requirements, the collateral put up by an investor when borrowing.

The euro extends gains, rising 0.2 percent after rallying Wednesday to snap a three-day slump. The shared currency advanced after a Greek government official said the country had started to draft a staff-level agreement on funding with representatives of its international creditors. The European Commission -- the European Union’s executive arm -- responded to say a deal isn’t imminent. U.K. gross domestic product and euro- area consumer confidence data are due Thursday.

Australian Capex

Australia’s currency and bond yields dropped after the government said capital investments fell last quarter by twice as much as economists had estimated. The yield on Australia’s three-year government bond dropped 8 basis points to 1.94 percent, heading for the steepest decline since Feb. 12.

The Philippine Stock Exchange Index sank to a four-month low and the nation’s peso erased a 0.2 percent advance after the government reported slower-than-expected economic growth for the first quarter. Gross domestic product increased 5.2 percent from a year earlier, less than the median estimate of 6.6 percent in a Bloomberg survey.

West Texas Intermediate crude added 0.2 percent after sinking 5.3 percent the past three trading days. U.S. inventories are forecast to fall by 2 million barrels, declining a fourth week, according to the median estimate before Energy Department data released Thursday.

Nickel for three-month delivery on the London Metal Exchange gained for a second day, while aluminum rose 0.7 percent after closing Wednesday at the lowest in more than a year.